Germany told to 'come clean’ over Greece

There were reports that Berlin is so worried that a Greek crisis would spin out of control that it is ready to back the next €31bn payment to Athens under its EU-IMF Troika rescue

Πηγή: The Telegraph

By Ambrose Evans-Pritchard
Sept 30 2012

German Chancellor Angela Merkel must “come clean at long last” and admit that Greece will need help for another seven or eight years, the German opposition leader said over the weekend.

“The Greeks must stand by their commitment, but we must give them time. We cannot tighten the screws any futher,” said Peer Steinbruck, the Social Democrat candidate for chancellor. He said the political and economic fall-out from Greek ejection from the euro would be devastating and must be avoided.

The plea came amid reports that Berlin is so worried that a Greek crisis would spin out of control that it is ready to back the next €31bn payment to Athens under its EU-IMF Troika rescue, despite failure to comply with the terms. Wirtschaftswoche, a German news magazine, said Greece’s parliament merely needs to vote on a list of detailed reforms.

It cited warnings from a top EU official that “domino-effect” dangers are too great to allow the ejection of Greece from EMU. Authorities across the world – including the Bank of England – fear a surge of capital flight from Portugal, Ireland, Spain, and Italy if the sanctity of monetary union is violated.

Diplomats say concerns go beyond financial damage. Both EU and US officials are worried that the fragile security system of the Western Mediterannean could start to unravel if Greece is alienated and withdraws from Nato under populist leaders in the future.

Washington has put intense pressure on Chancellor Merkel to accept a compromise that keeps Greece firmly anchored in the European bloc. Her ministers haves toned down their rhetoric in recent days.

François Heisbourg from the International Institute for Security Studies said an acrimonious Greek exit would be “extremely challenging”, leading to instability in the Balkans and opening the door to Russian meddling.

The apparent Troika deal gives Greek premier Antonis Samaras a chance to prove he can deliver an austerity package of €13.5bn, mostly cuts in pensions, benefits, and top civil service pay. His three-party coalition agreed on the “main points” in bruising talks last week.

Mr Samaras told the New York Times that there is “absolutely zero risk of Greece leaving the Euro” but he also said that lack of EU help would mean the “end of Greece”.

Payment of the next tranche may lift one cloud hanging over the markets but Greece’s drama has been eclipsed by events in Spain, where Catalonia’s drive for independence has rocked the country. The tense mood has not been helped by calls from top figures in Madrid for deployment of the Civil Guard to crush separatists.

Moody’s is expected to downgrade Spanish debt to junk status this week, which would make it harder to lure back global investors. The country is in limbo until premier Mariano Rajoy decides whether to request a rescue from the EU bail-out fund and sign a memorandum giving up fiscal sovereignty.

Analysts say the decision by Germany, Holland, and Finland to renege on a June summit deal to recapitalise Spanish banks directly may have hardened his will to resist. Paul de Grauwe from London School of Economics said the move by the AAA trio is a “disgrace”.

Spanish police clash with protesting miners

Miners sit on a street to protest against government austerity measures in Madrid July 11, 2012. Joined by supporters and trade unionists in the capital, the miners rallied noisily at the climax of a 44-day protest against a 60 percent cut in coal subsidies which they say will force mines to close and put many out of work.

Πηγή: Reuters
By Clare Kane and Emma Pinedo
July 11 2012

Police fired rubber bullets at protesting miners on Wednesday, injuring several people, during a demonstration against slashes in coal subsidies aimed at trimming the budget deficit of the euro zone's fourth largest economy.

Spain is cutting costs and raising taxes in an effort to hit strict European budget targets. Prime Minister Mariano Rajoy on Wednesday outlined a package of measures aimed at saving a further 65 billion euros ($79.66 billion).

The miners, joined by public sector workers and unions, rallied noisily in central Madrid at the climax of a 44-day protest against a 60 percent cut in coal subsidies, which they say will force mines to close and put many out of work.

"We're only asking that they cut 10 percent instead of 60," said Carlos Marcos, 41, who has worked in the mines for more than half his life. "If they don't pay attention to us, we'll be back - with dynamite."

Tens of thousands of protesters, chanting and throwing firecrackers, marched through the capital to the Industry Ministry, where some threw stones, fruit, bottles and firecrackers at waiting riot police.

Police charged at protesters and fired unleashed several rounds of rubber bullets after demonstrators knocked down fences to contain the protest.

Some of the miners on the "black march" had walked 400 km (250 miles) from the north of Spain where mining has been a part of life since the 18th century. Many waved wooden walking sticks.

"We have to take to the streets to fight because the time is coming when we won't have enough to eat," said 38-year-old miner Jose Ramon Pelaz.

Miners from all over Spain traveled in 600 buses to the capital on Tuesday.

They gathered in Madrid's Puerta del Sol, the center point of Spain and switched on the lights on their helmets in the early hours of Wednesday, and were met by thousands of Spaniards who turned out in sympathy.

The protesters marched down the city's main business strip, Paseo de la Castellana, singing rowdy songs and waving banners with slogans like, "Rajoy, your future is darker than our coal."

Official figures on the number of arrests were not available, but a Reuters witness saw several people detained at the protest.

Merkel set to face down France and Italy over pleas for action in eurozone crisis as world leaders meet for summit

Give us some slack: German Chancellor Angela Merkel said even Europe's strongest economy must not be overburdened

Πηγή: MailOnline

By MATT BLAKE
June 28 2012

• The German Chancellor spoke on the eve of EU summit
• Fears that leaders have never been more divided
• Italy and Spain want rapid action to lower their soaring borrowing costs
• France wants eurozone countries to share joint liability for each other's debts.
• It comes as Britain plans to pump another £1billion into propping up the eurozone’s stricken economy

German Chancellor Angela Merkel is preparing to square up to France and Italy over their pleas for emergency action in the eurozone crisis.

Instead she will demand that they roll up their sleeves and join in with the effort to clean up Europe's existing financial mess.

Her put down comes on the eve of the EU's 20th summit since the crisis began and as Britain unveiled plans to pump another £1billion into propping up the eurozone’s stricken economy – a move critics have called a ‘backdoor bailout’.

Italy, along with Spain, have begged Germany for rapid action to lower their soaring borrowing costs, while France wants eurozone countries to share joint liability for each other's debts.

But on the eve of the EU summit, which is due to start at 2pm British time, Merkel brushed aside their demands, accusing top EU officials of getting their priorities wrong.

'I fear that at the summit we will talk too much about all these ideas for joint liability and too little about improved controls and structural measures [on national budgets and economic policies],' she told parliament in Berlin today.


Friends or foes: Mrs Merkel talks to (right to left) Italian Prime Minister Mario Monti, French President Francois Hollande and Spanish Prime Minister Mariano Rajoy at a meeting in Rome last week

French President Francois Hollande is championing joint 'eurobonds' to bring down borrowing costs for the weaker euro zone countries as the pool of guarantors would include the strongest - meaning Germany.

But before the summit - the EU's 20th since the crisis began - Merkel repeated her objections to the plan, saying even Europe's strongest economy must not be overburdened.

The German chancellor said she did not expect to see the introduction of debt-sharing measures ‘as long as I live’.

But as Spain’s borrowing costs approached the 7 per cent danger zone yesterday, its prime minister, Mariano Rajoy, warned: ‘We can’t continue for a long time to finance ourselves with these prices.’

The EU’s 27 leaders first met to discuss the crisis formally at a summit in February 2010, when they agreed to ‘stand behind’ failing Greece.

David Cameron is expected to announce today that the UK will hand over £1.3billion to the European Investment Bank as part of an EU-wide growth plan.

The initiative – to be unveiled at a summit in Brussels, the 19th since the euro crisis began – came after demands by France’s new Socialist president, Francois Hollande.

Mr Cameron is expected to argue that kickstarting growth in Europe could have knock-on benefits for Britain.The EIB has also directly funded a number of projects in the UK.

In return, the Prime Minister is demanding that EU leaders sign up to reforms to boost competitiveness in their own economies.

The deal is designed to distract attention from continued infighting over radical measures to save the euro.

However, the decision is likely to anger many Conservatives and taxpayers. Britain is already liable for £12billion as a result of the bailouts of Ireland, Portugal and Greece.

Mr Cameron is also likely to come under pressure to hand over more cash to the European Commission after it warned yesterday that it was running £3.5billion over budget.

Eurosceptic Tory MP Douglas Carswell said: ‘It is just more money wasted. What part of “stop giving them more money” does the Government not understand?


Bailout: Prime Minister David Cameron is expected to announce that the UK will give £1.3billion to help the EU economy

‘They know they can’t get more money voted through Parliament and this seems like a way of achieving the same result by the backdoor.

‘If there is £1billion going spare I would much rather it was spent here delaying the fuel duty rise for another year or fixing potholes in my constituency.’

Christopher Howarth, of the think- tank Open Europe, added: ‘This feels an awful lot like spending for the sake of spending without doing anything to solve the eurozone crisis. We fear this won’t be good use of taxpayers’ cash.’


EUROPEAN LEADERS NEVER MORE DIVIDED

The summit is the 20th between leaders of the 27 EU states since the crisis erupted in early 2010.

The many meetings has given them a reputation for failing to match their talk with decisive action.

But EU leaders go into a Brussels meeting today more openly divided than at any time since the euro crisis began.

Germany's Chancellor Angela Merkel shows no sign of relenting in her refusal to back other countries' debts.

But French President Francois Hollande is championing joint 'eurobonds' to bring down borrowing costs for the weaker euro zone countries as the pool of guarantors would include the strongest - meaning Germany.

Meanwhile Spain is desperate for support for its ailing banks.

But Germany does not want to use its credit rating to support other members unless they first agree to share control of taxing and spending powers.

She is being urged at home to stay tough and reject all efforts to make Germany underwrite European partners' debts or banks, while her EU partners say that may be the only way to save the single currency.

'Nein! No! Non!' shouted a headline splashed across the front page of the normally sober German business daily Handelsblatt, with a commentary by its editor-in-chief saying Merkel must remain firm at the two-day summit.